| Question | Answer |
| Why is Global Economics is important? | Is important when political boundaries are important
*political boundaries: boundary is established in a legal form, usually a treaty or other written document ***not land boundary** |
| What is GDP? | is the value of all final goods and services produced in a country |
| What is a trade deficit? | When countries buy more goods and services than it sells abroad |
| What are political boundaries? | Location of a boundary is established in a legal form; usually a treaty or other written document |
| Comparative Advantage | a country’s ability to produce a given product relatively more efficiently/better than another country by doing it at a lower opportunity cost |
| what is "Free Trade"? | lowering or eliminating tariffs and other trade barriers between two or more nations |
| Interdependence | shared need of countries for resources, goods, services, labor, and knowledge supplied by other countries |
| World Bank | 1. provides loans to countries
2. fights world poverty
3.international financial institution |
| IBRD (Int'l Bank for Reconstruction) | -Restrictions on foreign items coming into the country
- Give loans to gov't for up to 30 years for rebuilding of infrastructure |
| IMF (Int'l Monetary Fund) | -Give loans to gov't for up to 30 years for rebuilding of infrastructure
-Facilitate int'l trade |
| Int'l Center for Resolution of Investment Disputes (ICSID) | -offers political risk insurance and credit guaranty
-help investors protect their foreign investments against political risks in developing countries |
| what is an open border? | dividing lines between countries |
| GNP | is the value of all final goods and services produced in a country |
| open border | enables free movement of people between different jurisdictions with limited or no restrictions on movement, that is no border control. |
| Immobility of labor was the chief reason what was established | European Union |
| The U.S. Great Depression in the 1930's | -Worst period of economic decline
-unemployment, stock market decline.
-30% unemployment rate |
| What stopped the Great Depression? | War time WWII spending or Deficit spending |
| A suffering economy is when | - currency exports are more expensive
-imports are more expensive |
| Multilateral Investment Guarantee Agency (MIGA) | member of the World Bank;
-facilitate the flow of foreign direct investment |
| Bretton Woods Agreement | for monetary and exchange rate management established in 1944 |
| The Bretton Woods Agreement Created | IMF and IBRD |
| Who belongs to the World Bank? | -IDA - helps poor countries
-IBRD - Provides loans to poor countries
-MIGA - Support economic growth, reduce proverty
-IMF-Provide a stable platform for foreign exhange
ICSID - settles legal disputes between int'l investors |
| ICSID - (International Center for Resolution of Investment Disputes) | -gives loans to govts for up to 30 years for rebuilding and infrastructure
- settles legal disputes between int'l investors |
| World War II 1940's | -goods were rationed, couldn't consume much
-we had massive deficit spending (lots of spending which took us out of the depression) |
| The global economy in the 1890's | -almost free trade
-very less restrictive
-good flow of trade |
